Success: Turning Kiwi expats into assets

Even far-off New Zealanders can still help their country, says Kea network.

Phil Veal, who lives in New York, wants to harness the resources of other overseas Kiwis. Photo / Supplied

He hasn't lived in New Zealand for more than 20 years, but from his current base in New York, Phil Veal is trying to make a difference in his country of birth.

Veal, 42, is among the million or so New Zealanders who live overseas. He also chairs Kea, the non-profit expat association formed by Sir Stephen Tindall and US-based academic David Teece, which aims to turn that diaspora into a national asset, especially for NZ businesses.

Veal says the challenge is to make Kea famous here and overseas. About 50,000 Kiwis or "friends of NZ" are connected through it, but Veal wants more people hooked into Kea's network.

"These are typically well educated, hard-working, let me call them patriots, and what we're trying to do is two things: one, we're trying to find them; and two, we're trying to engage and activate them to some sort of NZ-related cause. What is it they can do? What is it they can add?"

Alongside the bid to hook up more expats, a new campaign launches in the next few months, called Leaders for New Zealand. It focuses on a sub-set of 1000 or so heavy hitters who can make a material impact on NZ and its economy with one phone call, one introduction, one cheque or one investment, says Veal.

These are people who already receive lots of requests for help, so the connection will be more akin to the relationship model you may find in a private bank rather than in a post to their Facebook page, he says.

"I think one thing that NZ has going for it, and I see this more passionately and more fervently than I do with Australians, for example, is the willingness of people to want to stay connected and want to contribute."

Veal says that while people are always going to want to travel overseas, the challenge is harnessing them for the greater good of the country and giving them a pathway back if they choose to return.

His own pathway led him to leave NZ in 1992 with a degree in civil and structural engineering from the University of Canterbury. After a stint working as an engineer in Britain and Hong Kong, Veal became more interested in building businesses than physical structures, so he joined management consulting firm PA Consulting, and later set up the firm's New York office in 2000.

What was originally planned as a one-year excursion grew longer as he found reasons to stay: business opportunities, interesting people, marriage and four daughters.

By the mid-2000s he had joined project management company PIPC, which was sold to Nasdaq-listed Cognizant in 2010, launching the business in the Americas. In tandem, he was running Growfire, a private investment vehicle targeting small-to-medium size, privately owned companies, including NZ-owned businesses.

"I would like the option of moving the family back here at some stage and one of the prerequisites for doing that is to have something that I feel I can do constructively."

A "eureka" moment came when he saw the success of KiwiSaver which, in the five years since its launch, has attracted about $12 billion. What bugs Veal is the high proportion of the funds tied up in cash or equivalent investments producing only moderate returns.

"On the plus side, you're not going to lose that money. On the downside, that's not a way to prepare for retirement."

He sees a big opportunity for some of that money to be channelled into alternative assets - high-growth NZ businesses, farms or forestry resources.

Veal says alternative assets are part of the investment mix used by long-term investors such as US university endowment funds, public pension funds and the NZ Superannuation Fund, and should be an option for KiwiSavers.

The stumbling block is a legal requirement for KiwiSaver investors to be able to move easily between providers. That need for liquidity is impossible to meet with alternative assets, which are generally not easily tradeable, says Veal, so he suggests investors should be able to waive their liquidity rights for the portion of their money that is invested in such assets.

It's a plan put forward by Veal and fellow expat investors Adrian van Schie and Poojitha Preena in a submission on the Financial Markets Conduct Bill.

"The heart of the NZ economy is small and medium enterprises that you can't invest in via the NZX," Veal argues. "From what I've seen, being an investor in NZ from offshore, these folks are crying out for capital.

"What we're advocating would create a pathway for capital to flow from KiwiSaver into those businesses."

Helen Twose is a freelance business journalist who writes regularly about KiwiSaver and entrepreneurial companies. She has written for the Business Herald since 2006, covering the telecommunications sector, but has more recently focused on personal finance and profiling successful businesses.